Compilation of Rules and Regulations of the State of Georgia, Subject 110-37-6, Rule 110-37-6-.03 - Program Benefits and Limitations; Substantial Rehabilitation | Compilation of Rules and Regulations of the State of Georgia

(1) The amount of the credit shall be determined pursuant to O.C.G.A. Sec. 48-7-29.8.

(a) For all certified rehabilitations the amount of the credit equals 25% of qualified rehabilitation expenditures.

(b) For certified rehabilitation of a historic home in a HUD designated target area the amount of the credit equals 30% of qualified rehabilitation expenditures.

(2) Effective for tax years beginning on or after January 1, 2009:

(a) The amount of the credit for a certified rehabilitation of a historic home may not exceed $100,000 in any 120 month (10-year) period.

1. If only a portion of a historic home is used as the owner's principal residence, only those qualified rehabilitation expenditures that are properly allocable to such portion shall be deemed to be made to a historic home. The expenditures that then are allocable to the remainder of the building are not eligible for the credit.

2. In the case of a certified rehabilitation of a historic home that is a unit of a multifamily or multipurpose structure or group of structures the credit for the entire certified structure is limited to $100,000. In this situation the $100,000 credit shall be allocated between the owners based upon the qualified rehabilitation expenditures of each owner.

(b) The amount of the credit for a certified rehabilitation of a certified structure, excluding historic homes, may not exceed $300,000 in any 120 month (10-year) period.

1. Individual buildings within a group of buildings listed in the Georgia Register as an individual property/building(s), judged by the Department to be functionally related historically and with distinct primary/secondary hierarchical and proportional relationships, are collectively a single certified structure. Accordingly, the credit for the certified structure in aggregate is limited to $300,000.

2. Individual buildings within a group of buildings listed in the Georgia Register as an individual property/building(s), judged by the Department to be functionally related historically and without distinct primary/secondary hierarchical and proportional relationships, may be separately eligible for the credit.

3. Individual buildings within a group of buildings determined to be contributing to a Georgia Register listed historic district, judged by the Department to be functionally related historically and with distinct primary/secondary hierarchical and proportional relationships, are collectively a single certified structure. Accordingly, the credit for the certified structure in aggregate is limited to $300,000.

4. Individual buildings within a group of buildings determined to be contributing to a Georgia Register-listed historic district, judged by the Department to be functionally related historically and without distinct primary/secondary hierarchical and proportional relationships, may be separately eligible for the credit.

5. In the case of a certified rehabilitation of a certified structure with multiple units and ownership, the credit for the entire certified structure is limited to $300,000. In this situation the $300,000 credit shall be allocated between the owners based upon the qualified rehabilitation expenditures of each owner.

(c) The aggregate amount of credits for certified rehabilitations, including historic homes, earning and applying for $300,000 or less in credits may not exceed $5,000,000 in calendar year 2022.

1. Assignment and award of credits shall be in accordance with rules and procedures established by the Department of Revenue.

2. Determination and assignment of actual amount of available credit for an individual project shall be in accordance with rules and procedures established by the Department of Revenue

(3) Effective for certified rehabilitations completed on or after January 1, 2017 and on or before December 31, 2027:

(a) The amount of the credit for a certified rehabilitation of a certified structure, excluding historic homes, may not exceed $5,000,000 in any 120 month (10-year) period during which time only a single application for any individual certified structure may be approved if the amount of credits received is greater than $300,000.

1. Individual buildings within a group of buildings listed in the Georgia Register as an individual property/building(s), judged by the Department to be functionally related historically and with distinct primary/secondary hierarchical and proportional relationships, are collectively a single certified structure. Accordingly, the credit for the certified structure in aggregate is limited to $5,000,000.

2. Individual buildings within a group of buildings listed in the Georgia Register as an individual property/building(s), judged by the Department to be functionally related historically and without distinct primary/secondary hierarchical and proportional relationships, may be separately eligible for the credit.

3. Individual buildings within a group of buildings determined to be contributing to a Georgia Register listed historic district, judged by the Department to be functionally related historically and with distinct primary/secondary hierarchical and proportional relationships, are collectively a single certified structure. Accordingly, the credit for the certified structure in aggregate is limited to $5,000,000.

4. Individual buildings within a group of buildings determined to be contributing to a Georgia Register-listed historic district, judged by the Department to be functionally related historically and without distinct primary/secondary hierarchical and proportional relationships, may be separately eligible for the credit.

5. In the case of a certified rehabilitation of a certified structure with multiple units and ownership, the credit for the entire certified structure is limited to $5,000,000. In this situation the $5,000,000 credit shall be allocated between the owners based upon the qualified rehabilitation expenditures of each owner.

(b) The amount of the credit for a certified rehabilitation of a certified structure, excluding historic homes, where the project creates 200 or more full-time, permanent jobs or $5,000,000 in annual payroll within two years of the placed in service date may not exceed $10,000,000 in any 120 month (10-year) period during which time only a single application for any individual certified structure may be approved.

1. Individual buildings within a group of buildings listed in the Georgia Register as an individual property/building(s), judged by the Department to be functionally related historically and with distinct primary/secondary hierarchical and proportional relationships, are collectively a single certified structure. Accordingly, the credit for the certified structure in aggregate is limited to $10,000,000.

2. Individual buildings within a group of buildings listed in the Georgia Register as an individual property/building(s), judged by the Department to be functionally related historically and without distinct primary/secondary hierarchical and proportional relationships, may be separately eligible for the credit.

3. Individual buildings within a group of buildings determined to be contributing to a Georgia Register-listed historic district, judged by the Department to be functionally related historically and with distinct primary/secondary hierarchical and proportional relationships, are collectively a single certified structure. Accordingly, the credit for the certified structure in aggregate is limited to $10,000,000.

4. Individual buildings within a group of buildings determined to be contributing to a Georgia Register-listed historic district, judged by the Department to be functionally related historically and without distinct primary/secondary hierarchical and proportional relationships, may be separately eligible for the credit.

5. In the case of a certified rehabilitation of a certified structure with multiple units and ownership, the credit for the entire certified structure is limited to $10,000,000. In this situation the $10,000,000 credit shall be allocated between the owners based upon the qualified rehabilitation expenditures of each owner.

(4) The aggregate amount of credits may not exceed:

(a) $25,000,000 in each calendar year 2017 through 2022 for certified rehabilitations earning and applying for more than $300,000 in credits

(b) $5,000,000 in calendar year 2022 for certified rehabilitations earning and applying for $300,000 or less in credits, including historic homes

(c) $5,000,000 in each calendar year 2023 and 2024 for certified rehabilitations earning and applying for $100,000 or less in credits for historic homes

(d) $30,000,000 in each calendar year 2023 through 2027 for certified rehabilitations, excluding historic homes.

(5) Assignment and award of credits shall be in accordance with rules and procedures established by the Department of Revenue.

(6) Determination and assignment of actual amount of available credit for an individual project shall be in accordance with rules and procedures established by the Department of Revenue.

(7) Assignment, sale, or transfer of tax credits provided by O.C.G.A. Sec. 48-7-29.8 shall be in accordance with rules and procedures established by the Department of Revenue.

(8) Substantial rehabilitation of a certified structure requirements:

(a) Qualified rehabilitation expenditures for substantial rehabilitation purposes must be expended during a continuous 24 month period selected by the taxpayer.

1. For phased projects a 60 month period may be substituted for the 24 month period.

(i) Phased projects must be identified at preliminary certification application.

(b) A minimum of 5 percent of qualified rehabilitation expenditures for substantial rehabilitation purposes must be allocable to the exterior of the certified structure.

(c) For a historic home the qualified rehabilitation expenditures for substantial rehabilitation purposes must exceed the lesser of $25,000 or 50 percent of the adjusted basis of the property at the beginning of the 24 month period, as defined in subparagraph (a)(1)(B) of O.C.G.A. Sec. 48-5-7.2, which is the fair market value of the building (exclusive of the land) as determined by the county tax assessor.

1. For a historic home located in a target area the qualified rehabilitation expenditures for substantial rehabilitation purposes must be at least $5,000.

(d) For any other certified structure the qualified rehabilitation expenditures for substantial rehabilitation purposes must exceed the greater of $5,000 or the adjusted basis of the property as of the beginning of the 24 month period (60 month period for phased projects). For purposes of this subparagraph, the term "adjusted basis of the property" means the same as used in the Internal Revenue Code of 1986 (exclusive of the land), which is the basis used to determine gain or loss upon sale or disposition exclusive of the land.

(e) Qualified rehabilitation expenditures may only be counted once in determining substantial rehabilitation or determining the amount of the credit.

1. More than one entity may not claim a credit for the same qualified rehabilitation expenditures.

(9) For purposes of the Georgia State Income Tax Credit Program for Rehabilitated Historic Property, no costs pertaining to new additions to the certified structure(s) or new construction adjacent to or related to the certified structure(s) shall be considered a qualified rehabilitation expenditure or be recoverable as a tax credit.